Discussion PaperNo. 0105

Adelaide UniversitySA 5005, AUSTRALIA

Is there Any Value-added in the ASEAN

Surveillance Process?

George Manzano

February 2001

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CIES DISCUSSION PAPER 0105

Is there any Value-added in the ASEANSurveillance Process?

George Manzano

University of Asia and the Pacific, Philippines.

E-mail: gmanzano@uap.edu.ph

February 2001

Copyright 2001 George Manzano

___________________________________________________________________________________

Paper prepared for a Special Issue on Globalization for the ASEAN EconomicBulletin, to be edited by Ramkishen Rajan, 2001.

ABSTRACT

Is there any Value-added in the ASEAN Surveillance Process?

George Manzano

One of the earliest collective responses of the regional economies to the financial

crisis was to call for the establishment of a regional surveillance and monitoring

mechanism. This paper examines the role and limitations of the ASEAN surveillance

process in the context of crisis-prevention. A review of the gaps in existing global and

national surveillance systems in Asia highlights some of the challenges for the

successful development of the ASEAN surveillance process.

Key words: ASEAN, crisis, surveillance

JEL Classification: F30, F32, F34

Contact author(s):George ManzanoUniversity of Asia and the PacificThe PhilippinesE-mail: gmanzano@uap.edu.ph

1. Introduction

The East Asian crisis was remarkable for its rapid spread, its severity, and for

generally catching unaware international investors, governments, and societies at

large. It has severely tested the existing surveillance mechanisms in Southeast Asia

and found them wanting. Thus, one of the key policy initiatives agreed upon by

authorities in Southeast Asia, in the soul searching that inevitably followed the onset

of the crisis, was to call for enhanced surveillance for the region1. More concretely,

the ASEAN Surveillance Process was formally established in late 1997 as a

collective response to the financial crisis.

The ASEAN surveillance and monitoring mechanism occupies pride of place

as the primary regional institution to oversee the task of crisis prevention. By

institutionalizing the process of consultation and early warning to spot impending

shocks, it is hoped that future crisis could either be averted, or that its costs are

mitigated if ever one occurs. For these reasons, the initiative has received

endorsement at the highest political levels in the ASEAN.

This paper reviews the case for surveillance and monitoring in Southeast

Asia, highlights the merits and limitations of the ASEAN Surveillance and Monitoring

mechanism, and suggests ways for the surveillance mechanism to proceed in the

context of the lessons learned from the regional financial crisis of 1997.

2. The Case for a Regional Surveillance and Monitoring Mechanism

1 In November 1997, deputies from 14 economies from the Asia-Pacific (including Japan, theUSA and Australia) got together in Manila to craft a four-point regional response to the crisis.The outcome of the meeting, referred to as the Manila Framework, were: a) mechanism forregional surveillance to complement the global surveillance of the IMF, b) enhancedeconomic and technical cooperation in strengthening domestic financial systems, c)measures to strengthen the IMF’s capacity to respond to financial crisis and d) a cooperativefinancing agreement that would supplement IMF resources (Chang and Rajan, 2001).

2

A standard argument for international economic cooperation, is that

international financial and economic stability is a public good2. All countries benefit

from a stable financial environment regardless of whether they contributed to it. But it

also means that a country can easily disregard the potential negative spillover effects

it can create, if it adopts unsustainable policies in pursuit of certain national

objectives. As Crockett (1987) has emphasized, international cooperation in

surveillance is important to the extent that it helps national authorities internalize the

spillover effects in their decision-making processes. Partly for this reason, various

international institutions such as the G7 or the European Union (EU) have

institutionalized regular policy consultations to exchange views on the economic

policies of members, and occasionally to engage in coordinated intervention when

speculative pressures threaten financial market stability.

Surveillance is routinely carried out by different institutions and at different

levels. National surveillance is ordinarily the purview of central banks or specific

agencies in the ministries of Finance. A multilateral agency such as the International

Monetary Fund (IMF), on the other hand, carries out its surveillance activities on

bilateral and multilateral levels. Bilateral surveillance refers to the Article IV

consultations with individual member economies, whereas multilateral surveillance

pertains to the systematic analysis (including identification of risk factors) and

forecasting of the world economy, of which the IMF’s World Economic Outlook and

International Capital Market Report are the main vehicles.

Private companies, such as credit rating agencies, also perform surveillance

when they make country risk assessments in the course of assigning sovereign

ratings. Specialized global institutions such as the Institute of International Finance

(IIF) monitor capital flows and assess investment risks in emerging markets. The

2 International cooperation can take on many forms. For instance, Cooper (1985)distinguishes the different levels of cooperation starting from the simplest such as the literalharmonization of policies, up to coordination where joint actions are forged.

3

Bank for International Settlements (BIS) holds regular consultations among central

bank governors on matters affecting financial stability.

A review of current surveillance mechanisms reveals active work on the levels

of global and national surveillance. In contrast, there were few monitoring activities at

the regional level in Asia prior to the crisis3. Of course, there was no perceived need

for such a mechanism at that time. However, the severity and rapid spread of the

crisis that engulfed Asia, and more particularly, ASEAN, makes the case for regional

cooperation in surveillance and monitoring on a regional basis more compelling for a

number of reasons.

First, the rapidity with which the financial turmoil spread in Asia highlighted

both the reality and potency of the contagion effect. In just four months from the

moment the Thai baht peg collapsed, six economies in Asia succumbed to currency

crises despite their respectable macroeconomic standings at the time The

simultaneous occurrence of currency crises between economies, with a currency

collapse in one economy leading to a speculative attack on another (regional)

currency indicates the presence of spillover effects. The rapid spread of the crisis is

proportional to the degree of financial market linkages among economies in the

region, advances in the flow of information, and the degree of integration of the world

capital markets4.

In addition to trade and financial linkages which are well recognized, another

obvious explanation for the quick spread of the crisis is that advances in

telecommunications have made possible the very rapid transmission of information

and financial transactions in the world capital markets. Due to the ease of fund

3 There were consultations on financial issues in the Asia-Pacific region, notably the firstgovernor-led Executive Meeting of East Asia and Pacific Central Banks (EMEAP) and ASEANswap-arrangements as discussed in Chang and Rajan (2001), Moreno (1997) and Rajan(2000).

4 Chang and Rajan (2001), Goldstein (1999), Rajan (2000), Pesenti and Tille (2000) andKawai et al. (1999) discuss the various transmission mechanisms of contagion.

4

transfers, shifts in expectations on the financial standing of emerging countries by

international investors can result in significant changes in the capital flows in a very

short period. Indeed, it has been suggested that at the onset of a currency crisis, a

country’s official reserves can be severely run down in just a matter of 30 to 90 days,

and once the level of reserves fall below a certain threshold, even a near-optimal

macro and structural policy response will probably not stem the outflow of resources

in the short run5.

A second motivation for a more intensive regional cooperation in surveillance

stems from the severe economic and social costs of a crisis. The recent experience

show that large scale capital flow reversals, general uncertainty, curtailment of loans

and sharp decreases in asset prices could greatly destabilize financial and real

systems. The extent of destabilization flows partly from the very great disparity in the

size of private international capital markets relative to the official assets and national

financial systems of individual countries. For instance, Indonesia, Thailand, the

Philippines, and Malaysia reeled from a reversal of capital flows equivalent to

US$130 billion dollars between 1996 and 1998 (IIF, 2000). The implications of this

disparity in size is that the direction of private flows, particularly “hot money”, can

easily destabilize financial markets of developing countries, and that speculative

pressure from the markets could be very powerful for individual countries to

withstand.

Clearly the recent crisis served as a wake-up call to many Asian economies.

After growing briskly in the 1990s, the ASEAN as a whole, together with South

Korea, suffered steep declines in output in 1998. The contrast is striking in the light

of the congratulatory atmosphere with which ASEAN, after recording one of the most

impressive growth rates as a region, celebrated its 30th anniversary in 1997. The

Asian crisis has brought home the realization that a changed world environment, or

5 See ADB Institute Executive Summary of Public Seminar (1998).

5

more generally, economic globalization, has raised the stakes of policy failures

(Anderson, 2001 and Rodrik, 2000).

While actions to forestall a crisis have largely to be undertaken at the national

level, there remains a pressing need to explore regional solutions given the dynamics

of open markets and systems which link the economies closer with each other. The

establishment of a regional surveillance process for the ASEAN is one such initiative.

3. The ASEAN Surveillance Mechanism

The ASEAN Finance Ministers, in February 1998, decided that an ASEAN

economic monitoring mechanism should be established to complement the global

surveillance function of the IMF6. This was a key policy initiative in designing a

collective regional response to the Asian crisis.

ASEAN personnel with the ASEAN Finance and Central Bank Deputies form

the core group which actively manages the surveillance process. An ASEAN

Surveillance Coordinating Unit, based in the ASEAN secretariat in Jakarta, will

provide technical and coordination support for the process. The Asian Development

Bank (ADB) will provide technical assistance in capacity building and training to

seconded officials from the ASEAN nations for the first two years of operations.

The ASEAN surveillance process is envisioned to provide a monitoring and

early warning system for the ASEAN members. The process is also tasked to provide

an institutional setting where economic and financial developments in each member

and for the greater global environment as a whole are monitored and discussed. The

sharing of experiences provides valuable lessons on the effectiveness of policy

responses to certain economic phenomena, thus improving the policymaking

6 Background material for the ASEAN surveillance mechanism have been culled from thediscussions held in the Workshops of the Peer Assistance and Review Task Force of thePacific Economic Cooperation Council (PECC) (Sydney Australia, 20-21 April, 1999) and theWorkshop on Economic Monitoring in East and Southeast Asia organized by the ADB, ADBInstitute and PECC, (25-26 June 1998).

6

capabilities of the different national authorities. This mechanism also provides the

setting where ASEAN as a group can decide on certain collective actions.

In keeping with the “ASEAN way”, the surveillance process will be undertaken

on the basis of consensus and informality. Unlike more formal processes, such as

the EU, the leverage of the ASEAN surveillance in eliciting the appropriate behavior

or policy of members is “peer pressure”. While this may seem to depart from the

policy of noninterference in domestic affairs, ASEAN policymakers have increasingly

come to grips with the necessity of constructive engagement, especially in financial

matters where the contagion effects threaten (UN ESCAP, 2000).

The ASEAN Surveillance Coordinating Unit provides the policy support for the

process. The focus of the discussions is a draft surveillance report, produced by the

aforementioned unit, which incorporates the economic and financial data of

members, other topics relevant to the stability of the region, and inputs from

institutions undertaking regular surveillance activities. The IMF lends institutional

support to this process by providing the global macroeconomic outlook. After passing

through the level of ASEAN Finance and Central Bank Deputies Meeting, the draft is

finalized and passed onto the ASEAN Finance Ministers. The end product of the peer

review process could be regional or national measures that would find expression in

a joint ministerial statement. Thus, the consultations at this point are confined to the

ASEAN representatives.

4. Value-added in the ASEAN Surveillance Process

How meaningful then is an ASEAN surveillance process? How will it add

value to the existing surveillance mechanisms in Asia? Of course, in the absence of a

track record, evaluating a nascent initiative is not easy. However, the fact that the

crisis did take place and that it was largely unanticipated, indicate that there are

certain gaps in existing surveillance on the global and national levels. The usefulness

7

of the proposed regional mechanism should be evaluated according to the extent to

which it could address the gaps in existing mechanisms prior to the crisis.

What are the gaps in existing surveillance mechanisms and could the ASEAN

surveillance process potentially address these?

First, surveillance can fail because countries do not disclose adequate and

timely information. Information about existing conditions, decisions, and actions

should be made accessible, visible and understandable to all. In an early warning

system, the provision of timely and accurate information is critical in providing lead

times for policy responses to matter. Accuracy, on the other hand, is important for

formulating the appropriate policy response. Unless these information problems are

addressed, surveillance and early warning systems will be severely hampered.

Of course, transparency for its own sake is desirable because it helps instill

market discipline. In a world of global capital flows, crises can arise from information

surprises that cause the market participants to make sharp changes in their

expectations. In the context of the Asian crisis, improved transparency might have

helped prevent the build-up of huge maturity and currency mismatches in the

financial and corporate sectors, prompted swifter policy response, and limited

contagion. If markets had access to accurate and timely information, they can more

gradually adjust their investment decisions according to financial and economic

conditions of emerging markets, thus avoiding panics and “creditor-grab” behavior.

As Nord (2000) points out, transparency promotes public understanding of and

debate on economic policy, and makes policymakers more accountable for their

actions. Along this line, the moral hazard problems in crony capitalism, where cozy

relationships between banks and corporations can lead to overlending and

investments in excessively risky areas, can be addressed more satisfactorily when

information about the state of exposure of banks and other financial firms is known in

advance.

8

Moreover, transparency allows the markets to differentiate between countries,

thus helping them to function better. In periods of financial stress, a lack of

transparency tends to reinforce rather than dispel the uncertainty. As such, through

contagion, countries that have good underlying fundamentals can be adversely

affected. For instance, during the advent of a crisis, it is usually not easy to gather

good information such as the level of nonperforming loans (NPLs) and other

vulnerability indicators. Hence, the task of identifying the robust economies from the

affected ones in one region becomes quite difficult. As a consequence, the failure of

one emerging market can be taken by creditors as a signal to reevaluate the

creditworthiness of the other similar markets in the region.

In sum, the provision of timely information can help mitigate the specter of

contagion effects and stabilize expectations and market sentiments. As Rajan (2000)

has emphasized, for the ASEAN process to function well, the provision of timely,

reliable, accurate and comparable macroeconomic and financial data is paramount.

Unless the authorities are more forthcoming with providing information, there is the

risk that policy dialogues will be vague and, as a consequence, would not be

persuasive enough to influence country behavior. The value-added of the ASEAN

surveillance process would have to be evaluated on the basis to which it is able to

promote transparency or flow of information among ASEAN members. Clearly, the

preparation of the draft surveillance report on the ASEAN members would require

updated macroeconomic and financial data. In fact, while the full template of the data

required of each member economy is still under discussion in the ASEAN case, it is

likely that standard macroeconomic performance and financial indicators will be

collected on a regular basis. This at least is a promising start.

Second, even though an early warning system can in fact elicit a timely

warning or signal, surveillance may still fail because political considerations prevent

the appropriate policy response from being exercised. In fact, it has been reported

that the IMF had already foreseen the collapse of the Thai baht peg prior to its July

9

1997 crash but the appropriate policy response to adjust the exchange rate was not

forthcoming due to political reasons (Crow et al., 1999). The Asian experience

illustrates that, even though policymakers may know what needs to be done, they

may not do it because it is costly or they lack the political will. The danger of course,

is that this may lead to policy inertia until it is too late for policy responses to matter.

As mentioned earlier, peer pressure is the leverage by which the ASEAN

surveillance process aims to solicit appropriate policy changes among the members7.

In order to help members internalize the spillover effects of their individual policies

over the region, there should be a frank exchange of views. However, there are

certain concerns raised about how the realpolitik of ASEAN, particularly, its

noninterventionist policy, could constrain the effectiveness of the regional

surveillance process. In particular, Rajan (2000) has emphasized that apart from

substantial differences in size and levels of economic development, the non-

interventionist policy in ASEAN may prevent the expressions of criticisms directed

toward a particular country’s unsustainable (and probably misguided) policies.

Indeed, ASEAN was criticized for not taking substantial action to address the recent

crisis or not acting sooner. As a consequence, there are proposals to allow the

members to speak frankly and openly about their views on the developments in the

other members in the spirit of ‘constructive intervention and flexible engagement’

(Collantes, 1999).

In addition, to motivate the policymakers to adopt the required policy

response in the face of a looming crisis, taking into consideration the political cost of

doing so, there should be “ownership” of the process. Weak ownership of the

process can compromise the quality of cooperation of the parties concerned. This

has repercussions on the timely and accurate provision of data as well on the

willingness of the policymakers to engage in a frank exchange of views. For this

7 See, for example, the executive summaries of the ADB Institute sponsored workshops onregional surveillance in Asia: Responding to Crisis (ADB Institute, Tokyo, 1998), pp 79-102.

10

reason, the surveillance process is managed and run by ASEAN, and not by the IMF

or the ADB. Furthermore, by limiting the mechanism to the ASEAN members, the

process carries less risk of having the decisions held captive by the views and

individual agendas of the dominant economies.

The third gap is more technical in nature. It is possible that the models used

in the existing surveillance mechanisms were unsuitable in view of the nature of the

Asian crisis. Because of these technical limitations, the conditions in Asia prior to the

crisis were not diagnosed correctly and important points of vulnerability were not

picked up. Consider the IMF’s system of global surveillance. One criticism directed at

the IMF bilateral surveillance is that it did not focus enough on the state of the

financial sector, which has been the weak spot of the affected countries. Rather, the

IMF bilateral surveillance concentrated on macroeconomic issues instead of those

that deal with volatility of capital inflows, consequences of financial liberalization,

maturity mismatches, and asset bubbles which are more directly related to the

particular nature of the recent crisis in East Asia and elsewhere.

An analysis of this gap in surveillance raises a more fundamental point: Are

crises predictable? Predictability depends on the nature of the crisis. If the currency

crisis, for example, is induced by inconsistent macroeconomic policies similar to the

Krugman (1979) model, then it can be predictable. However, when the crisis is due to

financial panic (Radelet and Sachs, 1998) or effects of contagion, then it may be

essentially unpredictable. At best, only an indication of vulnerability of the economy

to shocks can be made8. Berg and Patillo (1998) tested the out-of-sample

performance of different models of early warning systems in predicting crises and

found the forecasting ability of the existing models rather poor9.

8 Salvatore (1999) has proposed a set of indicators that would have predicted the Asian crisisgiven critical values. However, the author does not present the basis for the rules of thumb forthe critical range of values for each indicator.

9 These models include the signals model of Kaminksy et al. model (1997); the probit modelof Frankel and Rose (1996); and the Sachs et al. (1995) model.

11

Apart from conceptual difficulties, there are some practical problems

associated with early warning systems. For one, there are doubts on whether

indicators of crises are alike for all countries. For another, there is the problem of

endogeneity of policy (Berg and Patillo, 1998) in that policymakers may respond to a

signal of an impending crisis and actually avert a crisis. However, in so doing, the

early warning that was raised becomes a false alarm as no crisis materialized, and

the track record of the early warning system in predicting a crisis may be perversely

sullied. Furthermore, constructing an early warning based on historical data to warn

of a crisis that has its origins in something new may be problematic. To illustrate, the

Asian crisis is different from the imbalances in the current account but rather stem

from the capital account and therefore calls for quite different crisis prevention and

management strategies10. The implication is that early warning models based on

different theories may be inadequate in predicting crisis arising from new

phenomena.

How equipped is the ASEAN surveillance process in diagnosing weaknesses

and spotting shocks? Of course, the state of early warning systems leaves much to

be desired in terms of effectiveness. However, there are valuable lessons learned

from the recent financial crisis in Asia that have not been lost on observers. The IMF,

for instance, in reaction to the recent crisis has decided to broaden its surveillance to

cover all the policies that affect trade, capital movements, external adjustment, and

the effective functioning of the financial system. These areas include structural

policies such as privatization, industrial policy, competition policy; financial sector

issues like banking supervision, deposit insurance, other financial sector regulations;

and policies pertaining to the capital account and exchange rate regime. To the

extent that quality policy support could be incorporated in the ASEAN surveillance

10 See discussions in the Report of the Commonwealth Expert Group (1998), Manzano andMoreno (1998) and Moreno et al. (1998).

12

mechanism, then the technical shortcomings observed in the existing surveillance

prior to the crisis might have been mitigated11.

The ASEAN members could benefit from the policy support arising from the

formal participation of the IMF and other international financial institutions such as

the ADB in the surveillance process. As the UN ESCAP (2000) discusses, these

policy support measures could take many forms such as (a) to increase awareness

of emerging markets of the transparency requirements; (b) to be familiar with the

international standards and how to meet them; (c) how to use data in order to

construct measures of their degree of vulnerability; (d) to know the range of policy

options available in the presence of shocks; and (e) to be conversant with new

technologies in surveillance and monitoring.

A fifth reason why surveillance can fail is that, even when monitoring and

early warning systems could signal the onset of impending shocks, the financial

condition of an economy may already be too weak for any crisis prevention measure

to matter. For instance, the neighboring countries should have taken the collapse of

the Thai baht peg as a signal of possible speculative attack on their currencies.

However, due to build-up of vulnerabilities over the years, their financial systems

could not handle the sudden capital reversals and consequent curtailment of credit

that took place. In contrast, though not insulated from the regional turmoil,

Singapore’s robust financial sector absorbed the shocks with less damage than the

most affected economies (Manzano and Moreno, 1998).

One explanation of the cause of the crisis is that it stems from policies that

encouraged imprudent lending or excessive risk-taking, making the economies

vulnerable to shocks. Since many economies in East Asia liberalized their financial

systems without putting in place the appropriate regulatory institutions, systematically

11 The ADB has established the Regional Economic Monitoring Unit (REMU) to act as a focalpoint for the monitoring exercise in Asia. The unit provides policy support by conductingspecialized topics on request and other inputs to the draft surveillance report for ASEAN.

13

risky banking practices and mismanagement persisted. The consequences were

dubious investments, maturity mismatches in the balance sheet of banks, and the

like. However, rapid economic growth rates masked the weaknesses of the financial

systems.

The ASEAN surveillance process could potentially address this gap by

instituting a system to facilitate the information flow for its members. Recall that the

build-up of vulnerabilities in the financial system could remain undetected due to the

lack of timely and accurate information. Transparency can reduce uncertainty and

allows the markets to assess risks more accurately. Furthermore, because

transparency promotes accountability of policymakers, they are encouraged (or

subjected to pressure) to make earlier and more fundamental policy adjustments

(Nord, 2000).

5. Final Remarks

Regional surveillance mechanisms are meant to complement and not

supplant the global surveillance function of the IMF or the national surveillance

activities of central banks. While more international cooperation is preferable to less,

a valid question is whether resources allocated to setting up the ASEAN surveillance

process is justified. While a strict benefit-cost analysis is obviously not possible, an

analytical justification of the usefulness of this mechanism can be made on the basis

of the extent to which this mechanism could potentially fill in the gaps of existing

surveillance in Asia.

A review of the gaps in Southeast Asia reveals that surveillance was not able

to prevent the crisis owing to lack of transparency, the presence of political obstacles

to policy adjustments, deficiencies in the surveillance models used, and the

pervasive extent of vulnerabilities. To the extent that the proposed surveillance

mechanism can: (a) promote more transparency, (b) allow policymakers to internalize

ADB, likewise, prepares a regional surveillance report twice a year which is to be used as abackground document for the Manila Framework meetings.

14

the spillover effects of their policies on other countries; (c) promote the ownership of

individual country reforms to improve the robustness of economic and financial

systems; (d) enhance the quality of policy analysis and support by tapping into the

resources of IMF, ADB, BIS, and other specialized agencies; and (e) give feedback

with regard to the extent of vulnerabilities of the financial systems, then the initiative

is properly placed to add value to the existing surveillance processes in East Asia.

These would constitute the concrete challenges of the ASEAN initiative on regional

surveillance.

The philosophical foundation for engaging in a regional effort is the principle

of subsidiarity. In crisis prevention, for instance, this takes the form of deploying, at

the regional level, the measures and instruments which are being advocated for

surveillance at the global level. Subsidiarity, which calls for devolving responsibility

for dealing with an issue to the lowest level of governance capable of handling it,

implies that measures might be better implemented through stronger regional

institutions or mechanisms in which many member countries can participate more

meaningfully than they can in global or multilateral arrangements (Mistry, 1999). A

regional mechanism could be a more “natural” disciplinarian as the countries that

make up the region would have the greatest stake in maintaining economic and

financial stability, and would presumably have the greatest incentive of internalizing

the effects of “irresponsible” policies.

In the end, the merits of the ASEAN surveillance ought to be judged on the

basis of whether it improves the ability of policymakers to identify policies that will

make their economies more resilient to shocks and suggest ways to respond to

shocks in an appropriate and timely fashion.

15

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CIES DISCUSSION PAPER SERIES

The CIES Discussion Paper series provides a means of circulating promptly papersof interest to the research and policy communities and written by staff and visitorsassociated with the Centre for International Economic Studies (CIES) at the AdelaideUniversity. Its purpose is to stimulate discussion of issues of contemporary policyrelevance among non-economists as well as economists. To that end the papers arenon-technical in nature and more widely accessible than papers published inspecialist academic journals and books. (Prior to April 1999 this was called the CIESPolicy Discussion Paper series. Since then the former CIES Seminar Paper serieshas been merged with this series.)

Copies of CIES Policy Discussion Papers may be downloaded from our Web site athttp://www.adelaide.edu.au/cies/ or are available by contacting the ExecutiveAssistant, CIES, School of Economics, Adelaide University, SA 5005 AUSTRALIA.Tel: (+61 8) 8303 5672, Fax: (+61 8) 8223 1460, Email: cies@adelaide.edu.au.Single copies are free on request; the cost to institutions is US$5.00 overseas orA$5.50 (incl. GST) in Australia each including postage and handling.

For a full list of CIES publications, visit our Web site athttp://www.adelaide.edu.au/cies/ or write, email or fax to the above address for ourList of Publications by CIES Researchers, 1989 to 1999 plus updates.

0105 Manzano, George, "Is there any Value-added in the ASEAN SurveillanceProcess?" February 2001. (Forthcoming in ASEAN Economic Bulletin).

0104 Anderson, Kym, "Globalization, WTO and ASEAN", February 2001.(Forthcoming in ASEAN Economic Bulletin).

0103 Schamel, Günter and Kym Anderson, "Wine Quality and RegionalReputation: Hedonic Prices for Australia and New Zealand", January 2001.(Paper presented at the Annual Conference of the Australian Agriculturaland Resource Economics Society, Adelaide, 23-25 January 2001.)

0102 Wittwer, Glyn, Nick Berger and Kym Anderson, "Modelling the World WineMarket to 2005: Impacts of Structural and Policy Changes", January 2001.(Paper presented at the Annual Conference of the Australian Agriculturaland Resource Economics Society, Adelaide, 23-25 January 2001.)

0101 Anderson, Kym, "Where in the World is the Wine Industry Going?" January2001. (Opening Plenary Paper for the Annual Conference of the AustralianAgricultural and Resource Economics Society, Adelaide, 23-25 January2001.)

0050 Allsopp, Louise, "A Model to Explain the Duration of a Currency Crisis",December 2000.(Forthcoming in International Journal of Finance andEconomics)

0049 Anderson, Kym, "Australia in the International Economy", December 2000.(Forthcoming as Ch. 11 in Creating an Environment for Australia's Growth,edited by P.J. Lloyd, J. Nieuwenhuysen and M. Mead, Cambridge andSydney: Cambridge University Press, 2001.)

0048 Allsopp, Louise, " Common Knowledge and the Value of Defending a FixedExchange Rate", December 2000.

0047 Damania, Richard, Per G. Fredriksson and John A. List, "TradeLiberalization, Corruption and Environmental Policy Formation: Theory andEvidence", December 2000.

0046 Damania, Richard, "Trade and the Political Economy of Renewable

Resource Management", November 2000.0045 Rajan, Ramkishen S., Rahul Sen and Reza Siregar, "Misalignment of the

Baht, Trade Imbalances and the Crisis in Thailand", November 2000.0044 Rajan, Ramkishen S., and Graham Bird, "Financial Crises and the

Composition of International Capital Flows: Does FDI GuaranteeStability?", November 2000.

0043 Graham Bird and Ramkishen S. Rajan, "Recovery or Recession? Post-Devaluation Output Performance: The Thai Experience", November 2000.

0042 Rajan, Ramkishen S. and Rahul Sen, "Hong Kong, Singapore and the EastAsian Crisis: How Important were Trade Spillovers?", November 2000.

0041 Li Lin, Chang and Ramkishen S. Rajan, "Regional Versus MultilateralSolutions to Transboundary Environmental Problems: Insights from theSoutheast Asian Haze", October 2000. (Forthcoming in The WorldEconomy, 2000.)

0040 Rajan, Ramkishen S., "Are Multinational Sales to Affiliates in High TaxCountries Overpriced? A Simple Illustration", October 2000. (Forthcomingin Economia Internazionale, 2000.)

0039 Ramkishen S. Rajan and Reza Siregar, "Private Capital Flows in East Asia:Boom, Bust and Beyond", September 2000. (Forthcoming in FinancialMarkets and Policies in East Asia, edited by G. de Brouwer, RoutledgePress)

0038 Yao, Shunli, "US Permanent Normal Trade Relations with China: What is atStake? A Global CGE Analysis", September 2000.

0037 Yao, Shunli, "US Trade Sanctions and Global Outsourcing to China",September 2000.

0036 Barnes, Michelle L., "Threshold Relationships among Inflation, FinancialMarket Development and Growth", August 2000.

0035 Anderson, Kym, Chantal Pohl Nielsen and Sherman Robinson, "Estimatingthe Economic Effects of GMOs: the Importance of Policy Choices andPreferences", August 2000. (Forthcoming in abridged form in MarketDevelopments for Genetically Modified Agricultural Products, edited by V.Santariello, R.E. Everson and D. Zilberman, London: CABI, 2001.)

0034 Anderson, Kym and Chantal Pohl Nielsen, "GMOs, Food Safety and theEnvironment: What Role for Trade Policy and the WTO?", September2000. (Forthcoming in Tomorrow's Agriculture: Incentives, Institutions,Infrastructure and Innovations, edited by G.H. Peters and P. Pingali,Aldershot: Ashgate for the IAAE, 2001.)

0033 Nguyen, Tin, "Foreign Exchange Market Efficiency, Speculators,Arbitrageurs and International Capital Flows", July 2000.

0032 Nielsen, Chantal Pohl and Kym Anderson, "Global Market Effects ofAlternative European Responses to GMOs", July 2000.

0031 Rajan, Ramkishen S., and Reza Siregar, "The Vanishing IntermediateRegime and the Tale of Two Cities: Hong Kong versus Singapore", July2000.

0030 Rajan, Ramkishen, "(Ir)relevance of Currency Crisis Theory to theDevaluation and Collapse of the Thai Baht", July 2000. (Forthcoming inPrinceton Study in International Economics, International EconomicsSection, Princeton University, 2000.)